Northwest Sees First-Quarter Loss

One-time costs hit the bankrupt airline.
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Northwest Airlines

(NWACQ)

Wednesday reported a reduced first-quarter operating loss, after lowering capacity by 10% and labor costs by 30% and improving its revenue performance.

The fifth-largest airline, which is operating under bankruptcy court protection, reported after the market close a first-quarter net loss excluding reorganization and unusual items of $129 million, compared with a $450 million loss in the same quarter a year earlier.

Including the one-time costs, however, Northwest lost $1.1 billion, or in the first quarter, nearly double the $537 million loss it recorded a year earlier.

Mainline revenue per available seat mile (RASM) was 10.09 cents, up 12.9%. Operating revenue was $2.9 billion, up 3.3%. Meanwhile, capacity fell by 10.1%, as fleet size decreased to 367 planes from 432 planes.

"During the quarter, Northwest continued to make progress on its restructuring goals to address the carrier's cost structure, resize and optimize its fleet and restructure its balance sheet," said CEO Doug Steenland. He noted that Northwest pilots

ratified a new contract last week, "bringing Northwest a step closer to realizing the $1.4 billion in annual labor cost savings it requires."

Operating expenses in the quarter were $2.9 billion, down 6.3%. Salaries were $676 million, down by 30 percent. But fuel costs were $744 million, up 18 percent. The operating loss was $15 million, compared with an operating loss of $301 million for the same quarter a year earlier. Northwest ended the quarter with $1.28 billion in unrestricted cash and short-term investments.